Standard Chartered Fined $330 Million in Iran Probe

Standard Chartered
expects to pay $330 million to settle a case with U.S.
regulators for breaking sanctions on Iran, the Asian-focused
bank said on Thursday, a second such penalty which could almost
wipe out its profit growth this year.

Standard Chartered
expects to pay $330 million to settle a case with U.S.
regulators for breaking sanctions on Iran, the Asian-focused
bank said on Thursday, a second such penalty which could almost
wipe out its profit growth this year.

Standard Chartered already paid $340 million to New York's
Department of Financial Services (DFS) in the third quarter, and
the London-based bank said the settlement with federal and other
state regulators was expected "very shortly".

The original DFS fine will cut pretax profit growth this
year to around 5 percent, from an underlying profit rise of more
than 10 percent, the bank said in a trading update - so the
additional payment could leave profits near flat on the year.

The DFS, New York's banking regulator, said Standard
Chartered had hidden financial transactions with Iran.
The bank agreed to pay the civil penalty after its stock dropped
due to the allegations and a threat to revoke its licence to do
business in New York.

The United States has led the drive for sanctions, hoping to
halt an Iranian nuclear program which Washington suspects is
aimed at producing weapons although Tehran says it is peaceful.

Even slim earnings growth would mean a 10th straight year of
record profits, as StanChart has ridden on Asia's rise
through much of the last decade, allowing it to continue hiring
and increasing earnings when much of the industry is shrinking.

Finance Director Richard Meddings estimated Standard
Chartered could have to pay $320-330 million next year under a
British bank levy. This is about $65 million more than
originally expected, due to finance minister George Osborne's
announcement on Wednesday that the levy would be raised.

Standard Chartered expects to pay about $210 million under
the tax this year, up from $165 million in 2011, and warned that
there has been a "significant and increasing cost of
regulation", in particular for liquidity.

The levy has been criticized for being harder on banks that
are expanding their balance sheet, even outside Britain. These
include Standard Chartered, which has threatened to quit London
if the cost of being based in Britain becomes too much.

Despite its regulatory costs, the bank is one of the few
still hiring and Meddings told analysts he expected to add more
staff this year than the previous guidance of about 1,500.

"We expect it now to be through 2,000 by the end of the year
as we continue to hire. A lot of that hiring is in the back
office support functions and compliance and risk, but it's also
in consumer banking," he told analysts on a call.

Meddings said the bank would add a similar number of jobs
next year. "We'd expect to be at around the same level for next
year," he told Reuters.

By contrast, most rivals have been cutting, with Citi
saying on Wednesday it was cutting 11,000 jobs.

By 1030 GMT StanChart's London shares were up 0.9 percent,
trailing a 1.1 percent rise in European bank shares.